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Rates updated 11/21/18. CIT Bank (not to be confused with Citi Bank) is an online-only bank with a multi-year history of competitive rates. They don’t offer a checking account and instead focus on a variety of savings and CD products with high interest rates. Here are the highlights:

11-Month No-Penalty CD at 2.05% APY with $1,000 minimum to open. 11-month CD keeps a fixed rate, but no withdrawal penalty seven days or later after funds have been received. This means that your interest rate will never go down, but you can still move out if interest rates go up. (If you have an existing No Penalty CD that you want to close and open up a new one, please see my instructions below.)

Each of these types of account has their pros and cons. The No-Penalty CD has a rate that can’t go down, but also has a $1,000 minimum balance. The 18-month CD has a higher rate, but significant penalties if you make an early withdrawal. The Money Market rate could rise or drop, and also has more flexibility as you can easily make more deposits and also make 6 withdrawals every month.

New customer? Opening process overview. Here’s my review of the opening process if you are a new customer.

The application process was completely online. You provide the usual personal information.

You must submit to a credit check, but in my experience it was a “soft” pull which did not harm my credit. None of my various credit monitoring services showed it was a hard pull.

You may fund via (1) electronic ACH transfer, (2) wire transfer, (3) mobile check deposit via CIT Bank mobile app (iOS and Android), and (4) mailing in a paper check. There was no option for credit card funding. I picked online ACH funding and you need to provide routing and account numbers, followed by manual verification via micro-deposits after a day or two. There was no instant linking option via login information.

After deposit verification, then your funding will go through.

You have successfully verified your external account. Please allow up to 5 business days for your funds to appear in your CIT Bank account.
No further action is required for this account. Thank you!

Existing savings or money market customer? Check your rate. If you already have an existing High Yield Savings account, it may remain at a lower interest rate than this money market account. If so, take a minute and upgrade yourself to the better interest rate. Click on “Open an Account” here, then “I have a CIT Bank account”, and then login with your username/password. You can do everything online and even fund your new Money Market account with an instant transfer from your existing Premier High Yield Savings. I wish I didn’t have to do this, but at least it literally only took a minute to complete.

How to transfer your money from an existing No Penalty CD into an new, higher-rate No Penalty CD (or any other new account). Let’s say you opened up a No Penalty CD at 1.55% APY or 1.85% APY, but then the rate for a new CD has risen to 2.05% APY. You have the option of moving the funds (with no penalty of course) over to a new CD with a new 11-month holding period. I just did this, and here’s the easiest way to do so:

After signing in, go through the opening process but look for “Existing CIT Bank Account” under “Funding Source”. You should see a list of your existing accounts, including any No Penalty CDs. (Screenshot below.)

Note that online, your only option will be to have the entire CD balance (including accrued interest) moved over into the new CD. If you want a different amount, you’ll have to call CIT Bank customer service at 855-462-2652, open M-F 8a-9p ET, Sat 9a-5p ET, Sun 11a-4p ET. Press “0” for operator. Tell them you opened up a new No Penalty CD and you wish to fund it by closing out your old No Penalty CD.

That’s it. The online option says it will take 2-3 business days to complete. Your new accounts will show up online.

User interface. While the front-facing website is pretty slick, after you login the backend is run by Fidelity National Information Services (subdomain ibanking-services.com). This is a popular backend software system used by many smaller banks who don’t want to create their own software from scratch. As of early 2018, the user interface was upgraded to be look more appealing and be more user-friendly. Two-factor authentication is available using voice or SMS.

There is also an app available (iOS/Android) provided by the same company. It is similarly functional and includes mobile check deposit. Here are some screenshots:

Bottom line. CIT Bank is a lean bank offering targeted products for folks looking to get higher interest rates on their cash balances. They don’t do physical bank branches, checking accounts, or fancy apps. However, I have been pleasantly satisfied with their customer service on my accounts with them. Their most compelling products are their Money Market accounts, 11-month No Penalty CD, and usually they have a top rate on one of their Term CDs. The No Penalty CD is unique in that you are always able to move out to a higher rate, even within CIT bank itself.

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One possible factor is that the Ally CD does not allow partial withdrawals, so if you break it you’ll have to take out the entire balance of $25k+. As this CD has a $1,000 minimum, you can make multiple smaller CDs so that if you need money, you don’t need to withdraw everything. For example, you could take out 5x $5,000 CDs and just take out $5k at a time. It basically makes the No-Penalty CD closer to a regular savings account.

Oops, this review was published accidentally while still a working draft. I’m still working on gathering some information about their interbank transfers and adding screenshots, etc. Ah well, it’s up so I’ll leave it up and edit it later.

CIT seems to be great on raising their No Penalty CD rates. As stated, the current 1.55% rate was recently 1.45%, but it was also as low as 1.25% as recently as about the middle of this year. Happy to see this keep rising.

Recently moved an IRA account from CIT to ALLY as CIT got out of the IRA business but offered to keep existing accounts at a terrible renewal rate. Process went from tedious to incompetent. Finally got it done after multiple phone calls and faxes. Have had accounts with them since 2013 and was happy with rates and ease of website. Maybe because it was an IRA account but moving everything back to ALLY for simplicity and better customer service.

These rates are great but for those of us who froze our accounts at all the credit reporting agencies, is there any easy way to start one of these accounts without removing the freeze everywhere for a few days??

Well, I suppose you could try and apply for an account, they ask you to give permission to do a soft credit check, but I’m not sure if they actually do it. If the application is denied, I don’t think any harm is one. Otherwise, I would say this is simply on of the hassles that come with credit freezes, and a major reason why I chose not to do one.

I wouldn’t say one is preferred necessarily over the other. Each have pros and cons. Savings accounts can go up and down with rates, but you can move money in and out easily. No Penalty CD will never pay you less than the given rate within the 11-month term, but you will have to break the CD to get your money out.

I am a customer of CIT Bank. Great rate on the No Penalty CD, however I get slightly frustrated with CIT as the process of closing and opening CD’s is not a simple process for them and seems to take forever. They need to game up their efficiency.

Jonathan, I don’t think the PHY Savings acct has the 6 transactions per statement cycle restriction. As I’m looking at the “Overview” tab on CIT Bank site I don’t see that restriction on the PHYS, only on the new MM. That may be the main difference between the accounts.

I’m not sure why CIT Bank only points it out for the money market account, but my guess is that people are more likely to be confused by the term “money market account” as “money market mutual funds” have a similar name but with important differences like no FDIC-insurance.

Since Ally increased their rate on online savings accounts to 1.85% recently which matches my CIT No Penalty CD rate I just called CIT asking them to close my CD and transfer funds out. They offered me to reopen a new 11-month No Penalty CD at 2% APY. This rate is not advertised, it was offered to me by a CSR on the phone as a retention bonus. CSR guided me over the phone to open a new CD with “mail-in check” as funding source and then transferred the funds from the old CD to the new one. Process was quick and simple. Just an FYI.

If I withdraw from the No Penalty 11-month CD after only two months, will I still get the 2.05% interest I acquired over that period — or do I forfeit interest since I withdrew before the 11-month period?

I was lucky to have scored the 2.5% rate on a 12 month CD before they bumped the time frame up to 18 months on the same rate. And with rising rates I’m hesitate to lock up my money for more than a year.

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MyMoneyBlog.com is for informational purposes only. Do not take it as legal, financial, or tax advice for your personal situation.

Rates and terms set on third-party websites are subject to change without notice. Per FTC guidelines, MyMoneyBlog.com has financial relationships with the merchants mentioned. MyMoneyBlog.com is compensated if visitors click on any outbound links and generate sales for the said merchant.

The editorial content on this site is not provided by the companies whose products are featured. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser.